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Woods finance talks continue

By April Lehmbeck

Posted March 13, 2013

GROSSE POINTE WOODS — The City Council’s Finance Committee took a look at the numbers for the 2013-14 budget, but not everyone agreed with how much to dip into the city’s rainy day fund to make ends meet.

The committee met March 11, but they’ve been talking finances for the last several weeks.

For the 2013-14 budget proposal, which won’t be approved until later this year, the administration established a proposed budget for council to review.

“Mr. (Al) Fincham and I went through each one of these funds,” City Treasurer/Comptroller Dee Ann Irby said of the time she and the city administrator spent on the proposed budget.

The big discussion at the table seemed to be whether the city would take $1.2 million out of its reserves to balance the budget or make significant cuts so that they can limit the amount they take from those funds.

Council member and Finance Committee member Michael Koester didn’t recommend getting that $1.2 million down to zero, but he wanted to see that number slashed significantly. He believes that cutting the budget was what residents said they wanted when they voted down the millage proposal last November.

“If we can get it down to, say, $600,000 or $700,000, that gives us a more tenable position going forward,” he said, adding that the city should take the necessary steps to live within its means. “I think there’s a lot of value in doing that.

“The things that we have under our control is not the revenue, but the city services,” he said.

Koester recommended taking a look at changes like privatizing some services, such as the ambulance service. He realizes the city wouldn’t be looking at pleasant choices, but rather “which is the lesser of two evils.”

If the city continues on its current path without changes in revenue or major cuts, the city will deplete that fund in upcoming years.

Koester believes the voters gave them direction to make cuts when the millage proposal failed last November.

“It’s our responsibility to listen to what the voters said,” he said. “We need to live within our means.”

He doesn’t like the idea of not trying to make the tough cuts to hold out in the hopes of putting another millage proposal in front of voters in 2014. He feels that would be disingenuous.

“We’re not doing what we need to do,” Koester said. “We don’t find ourselves in a great situation.”

The problem, however, is that not everyone at the table agreed that the message from the voters was to make drastic cuts to services.

“I hear quite a bit from residents, and more so lately what I hear from residents is, whatever you do, don’t cut services,” Council member and Finance Committee Chair Todd McConaghy said, later adding that he takes his “cue from the residents, not what I think the residents might be thinking.”

“I’m not hearing the same message from the residents that you’re talking about,” he said to Koester.

He realizes that it puts the city in a difficult situation, because residents don’t want cuts, but they also don’t want the city to do more to increase revenue that has declined in recent years due to the economic downturn.

Because most of the city’s budget is made up of manpower, the city would be looking at significant staffing cuts to substantially reduce the amount they need to take from the general fund reserves.

“I would say just off the cuff that would be eight to 10 employees,” Irby said.

While the other two committee members did not agree that they would support drastic cuts to staff or privatizing things like ambulance service, they did agree to have the administration look at the issue and bring back information at the next meeting.

McConaghy asked Fincham and Irby to come back and show them what those types of cuts would mean, how it would impact services and what they suggest on the issue.

“I don’t want to zero in on one department,” McConaghy said. “I want to do it across the board. Show me what it looks like.”

He believes he already knows the outcome, and it would result in drastically understaffed departments, like the Department of Public Safety.

“I have a pretty good idea what it’s going to look like,” McConaghy said. “I don’t like what it’s going to look like.”

Mayor and Committee member Robert Novitke said he also wasn’t saying he was in support of these types of cuts, but did agree to have that discussion.

“Let’s have those numbers,” he said. “Let’s see what it means.”

He also thinks things are starting to move in a better direction.

“I don’t like to see a number like that,” he said of the $1.2 million figure.

Yet, he sees the assessments rising, which will hopefully mean rising revenues in future years. Also, property values are tied to the ability to sell homes in a community.

“I think if we reduce services, it will not be as desirable to move here,” Novitke said.

He believes the city isn’t in a crisis mode at this point, but realizes that is coming.

“2014 would probably be the year that it would truly have to be put on the table,” he said of the need for major cuts, adding that he does think residents need to be informed of the financial situation.

“Would you do that this year without having that message really out there?” he said of making drastic cuts. “Once we do this, it’s done.”

In recent weeks, there has been some good news, however. The city’s property values started to rise after the economy sunk the property values in cities across the country over the last several years.

While that may be a good sign that things are starting to turn around, it doesn’t necessarily mean big changes in the amount of tax dollars the city can bring in. That is because the city is capped at the amount they can see in increases, despite the actual growth in property values.

The city has taken steps to keep costs down, including continuing to avoid capital improvement projects when possible. For instance, some of the city’s vehicle fleet is at a point where they need costly repairs, but they would be costly to replace, as well.

“We’ve got a great mechanic and we’re really limping along on those,” Irby said.

The city is looking at ways to make things cost neutral when possible. For instance, the cost of the city’s parking attendants is close to neutral, when considering the revenue from tickets.

To bring in more revenue so that the program pays for itself, Irby said the director of public safety has recommended hiring a part-time parking attendant to bring in more revenue at a low cost.

“There is a hiring freeze and any positions would have to be approved by council,” Irby said.

A couple of residents spoke during the meeting, one giving a few of her own suggestions, like going to the residents for input.

“You know that the community was opposed to millage increases,” said resident Chris Kaczanowski. “I think that there’s a message there, and that is we need some input.

“Why not a community survey? … Get some real input, not just from a few people on the street,” she said.